Global Property Insurance Rates Continue Descent: What’s Driving the Shift?
Global property insurance rates are continuing their downward trajectory, marking the sixth consecutive quarterly decline as of Q4 2025. Broker Marsh Risk reported a 9% global decline, with the Pacific region experiencing the most significant drop at 14%. This trend signals a softening insurance market, offering potential benefits for businesses and property owners.
The Forces Behind the Falling Rates
Several key factors are converging to drive this decrease in property insurance costs. Increased competition among insurers is a primary driver, alongside a favorable loss environment and more competitive reinsurance pricing. Crucially, market capacity has increased, meaning there’s more available coverage.
John Donnelly, President, Global Placement at Marsh Risk, anticipates this trend will continue throughout 2026, barring unforeseen events. “Clients have the opportunity to secure reduced premium rates and negotiate broader terms,” he stated, suggesting a window for businesses to enhance their risk programs.
Regional Variations in Rate Declines
While the global average decline was 9%, significant regional variations emerged. Latin America and the Caribbean (LAC), India, the Middle East and Asia (IMEA) and the UK all recorded double-digit decreases. The United States saw an 8% decrease, a slight moderation compared to the 9% decline in Q3 2025, attributed to the timing of January renewals and a shift in the composition of catastrophe-driven placements.
Canada mirrored the US with an 8% decline, with insurers offering more favorable policy conditions to attract business. The UK experienced a more substantial drop of 10%, fueled by intense competition and ample capacity, even in challenging industry segments. Europe saw an 8% decline, while IMEA experienced an 11% decrease, with variations within the region – rate declines in the Middle East and Africa ranged from 5% to 15%, and India saw decreases between 15% to 25%.
Pacific Region Leads the Way in Rate Reductions
The Pacific region continues to lead the decline, with rates falling for the seventh consecutive quarter, dropping 14% in Q4 2025. The most substantial reductions occurred in sectors previously facing high rates and capacity limitations.
Asia experienced a more modest 5% decline, consistent with Q2 and Q3 2025. LAC saw a 12% decrease, with Chile and Brazil experiencing the most significant reductions.
Looking Ahead: Reinsurance and Market Conditions
Insurers are expected to pass on the benefits of efficient property reinsurance pricing into 2026, particularly given the softer market conditions observed during January renewals. This suggests continued downward pressure on property insurance rates in the near future.
Pro Tip
FAQ
Q: What is driving the decline in property insurance rates?
A: Increased competition among insurers, favorable loss experience, competitive reinsurance pricing, and increased market capacity are the primary drivers.
Q: Which region experienced the largest rate decline?
A: The Pacific region saw the largest decline, with rates falling by 14% in Q4 2025.
Q: Is this trend expected to continue?
A: Marsh Risk anticipates the trend of declining rates will continue throughout 2026, barring unforeseen circumstances.
Q: What can businesses do to benefit from this trend?
A: Businesses should review their insurance coverage and negotiate with insurers to secure reduced premiums and broader terms.
Did you know? The global commercial insurance market has been characterized by ample capacity for the last six quarters.
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